Will “Banks” For Data Solve Our Privacy Woes?

For years now, what web sites do with our data has become a serious problem in the online world. From confusing settings on Facebook – like their recent decision to again set strange defaults in Facebook Places – to online banking, how information about our lives is protected, distributed and use online has become a real issue.

The big sticking point? Every individual site has its own rules about how it uses data. That means that not only do users have to carefully parse the user agreements for each site, they have to keep track of any ongoing changes.

Think about that: that’s like you having to read new credit terms for every store you visit, rather than relying on 1 or 2 credit cards and a bank card for your transactions – or worse, like having a separate bank account for each place you purchase things from.

What’s more, as we increasingly move toward the cloud, more and more people have their files scattered around the internet.

But what if we treated our personal data like we do money: that we generally entrusted it one institution who would make it their business to secure our information? The would control who got access to our data and how much of it according to its users’ wishes, and would also serve as a cloud storage service?

Personal Data is The Web’s Currency

With the rise of social media, personal data has become the currency of the web. When you think about it, the business model of Facebook is to provide a network for people to connect so that it can monetize those connections.

In fact, personal data is like the holy grail of web advertising: the percentage of people who click on ads goes way up when you can target specifically to their interests.

But how do you handle this in the face of growing privacy concerns?

The Cloud Needs A “Bank”

Well, what if your personalized data ran through a third-party service whose only responsibility was, well, your personalized data? And rather than handing it out to companies and then profiting from it, what if they anonymized that data so that, for example, a newspaper could serve you an ad targeted directly to your interest in, oh I dunno’, Android smartphones, without that newspaper knowing that you were ‘you’?

Why the Bank Metaphor Works

Thought of one way, the idea that we hand over our money to someone else seems strange. But because banks are so normalized, we recognize both the safety and convenience of having our money outsourced to a large company where it is protected, but also universally accessible from any point.

A ‘bank’ for data would perform a similar function, except rather than only storing your data (and possibly files, too), it would also anonymize that data before allowing advertisers access to it. The bank itself would function as a kind of translator or conduit, allowing advertisers to get access to crucial data without that information simply freely floating to be appropriated by suspect sources.

Not only would this be more secure – after all, what’s more secure, a bank’s firewall or your router’s? – it would also help to alleviate the growing tension between the ad industry and privacy advocates, an issue that is preventing the growth of ad-supported businesses across the web.

Most importantly, however, is that people concerned with online privacy could hand their data over to a company whose sole function is the protection of that data. Like banks before them, once people get over the initial discomfort, their institution would enable an economy to develop around them.

Problems

Unfortunately, the bank metaphor is rife with technical problems.

First, the anonymization of data would require some sort of dual-ended plug-in system in both a user’s browser and the company that serves ad. Whether or not any company could create a secure system in the form of a browser plug-in is a huge question.

Another is the issue of money. While banks kept your money and earned interest on it, can selling both service and anonymized data turn into a profitable, practical business?

More generally though, will people be willing to hand over their data? Or would they rather simply not give it to anyone at all? The key here would be the capacity of some mythical ‘data bank startup’ to convince users of the benefits of their service.

Do you think ‘banks for data’ would work? If not, what is the best way for privacy and advertising to co-exist?